Seeing is believing: Indian spices companies keen to invest in Rwanda after exposure visits

‘Partners in Development’: ITC-SITA chairs session on Agriculture & Food Processing at CII-EXIM Bank Regional Conclave
December 6, 2017

By Devika Jyothi

SITA, Supporting Indian Trade and Investment for Africa, is forging ahead with its mission to strengthen the spices sector in East Africa through knowledge, technology and best practice exchange from India. SITA promotes exports by establishing linkages between Rwandan farmers and buyers and processors in India; the largest spices producer, consumer and buyer in the world. After successful pilot interventions in chilli cultivation and investment promotion, SITA is now looking at further possibilities for Indian investment in the spices sector in East Africa.

Seeing is believing. So SITA organises exposure visits for interested stakeholders and entrepreneurs to experience and understand the possibilities for trade and investment between the two regions.  From 14-18 November 2017, SITA organised an exposure visit for four entrepreneurs from the South Indian state of Kerala, India, a hub for the global spices trade, to Rwanda to see the potential for commercial spices cultivation and establishment of processing units in the East African country.

Led by SITA’s eminent spices expert and former Executive Director of the Spices Board of India, Dr. C.K. George, the Indian delegation included business representatives from leading spices companies such as Synthite Industries, Kancor Ingredients Ltd, Krishna & Co as well as the chairman of World Spice Organisation (WSO) and business head of All India Spices Exporters Forum (AISEF), Mr. Ramkumar Menon. The delegation met with the Rwandan Minister of State for Agriculture, Mr. Nsengiyumva Fulgence, Ambassador George William Kayonga, CEO, National Agricultural Export Development Board (NAEB), Mrs. Sandrine Urujeni, Deputy CEO, NAEB, and Mrs. Winifred K. Ngangure, Head of Investment Promotion, Rwanda Development Board. They also visited the SITA-supported spices farms in Bugesera and Rusizi districts which grow hybrid chilli varieties introduced from India.

‘Chilli is of primary interest to Indian spices producers, while the possibilities of turmeric, ginger, black pepper and vanilla are also being looked at,’ said Dr. George. He added, ‘Rwanda produces some volume of birds eye chilli and a nominal quantity of fresh ginger presently and there is potential opportunity for expansion into different varieties of spices, which will happen in the due course.’

The global demand for chilli has been growing consistently and chilli products are finding application beyond the food industry. While some Asian countries consume chillies directly, the United States of America and the European Union import mainly for its oleoresin requirement.  Chilli provides two high value products, capsaicin, the pungent compound and capsanthin, the colour pigment. Capsaicin finds application in food, pharmaceutical industries and as a natural and safe substitute for tear gas used by security forces. Capsanthin is used as a natural colourant in the food industry in place of synthetic dyes which are carcinogenic.

India, the world’s largest chilli producer, consumer and exporter of chilli, produces over 1.3 million tonnes from an area of 791,930 hectares. India exports nearly 177,000 tonnes and imports nearly 1000 tonnes. India also imports crude chilli oleoresin—the extract of dry chilli—mostly from China and exports it after refinement.  With the increasing global demand, the market for chilli and chilli extracts is expected to grow even more.

Through SITA, India presently supports chilli production in Rwanda with buy back arrangements. Following a trial cultivation of six Indian hybrid chilli varieties in Rwanda in 2016, Kerala-based Akay Flavours and Aromatics Private Limited selected two hybrids namely, Sarpan Dandicut-2 and Namdhari-1701 for commercial production. The two varieties are now under cultivation in Rwanda, with an expected production of over 100 tonnes. The plan is to expand production to 500 tonnes in 2018, and reach 1000 tonnes of dry chilli by March 2019. Akay Flavours will then consider establishing an extraction unit for production of chilli oleoresin in Rwanda for export to India and other countries.

The Indian delegation also visited the SITA-supported chilli farming sites in Bugesera and Rusizi districts to see and assess the potential of producing and processing high value spices from Rwanda.

‘Thanks to SITA we were able to see rural areas of Rwanda and Uganda. What struck me was the commonalities of challenges in the agro-sector, especially in spices,’ said Mr. Ramkumar Menon. ‘We will be happy to share our experiences in addressing these challenges,’ he said, adding, ‘of utmost importance is the need to train and educate farmers, processors and exporters on quality aspects.’

‘The Indian delegation visited our chilli farms located in Eastern Province, Bugesera District,’ said Mr. Giscard Tuyishime, a SITA-beneficiary.  ‘They appreciated our chilli farming, commenting on the good agricultural practices, particularly averting the use of harmful chemicals.’

‘They also proposed new business models to perfect chilli farming, and possibilities of making it into a real farming business.  We hope the association will help us in future,’ Mr. Tuyishime added.

Rwandan chilli

Encouraged by the visit, the Indian delegation expressed their interest in investing in Rwanda.

Synthite Industries, one of world’s largest spice extraction companies based in Kochi, India, is looking to start the cultivation of chilli and other spices in Rwanda, with the objective of setting up a primary processing unit –  a US$ 1.2 million investment –  by 2020 and making Rwanda a hub for their African operations. The project is expected to start with a 20 hectare pilot in early 2018, with the appointment of 1 or 2 people to monitor the project, according to Mr. Vishal Menon, Synthite’s Chief Development Officer.

Kancor Mane, whose Business Head, Flavours Division, Kancor Ingredients Ltd, Mr Pratap Vallikkaden, joined the delegation, is also looking into expanding their presence in Africa, with Rwanda as their base. The company would pilot chilli, ginger and turmeric cultivation on 20 to 30 hectares in the first year, with the possibility of expanding their operations in Rwanda significantly going forward. Kancor Mane would also organise their CSR resources to invest in education and health of their grower community.

An entrepreneur himself, Mr. Ramkumar Menon of WSO will collaborate with Mr. Krishna Kumar Bhammer of Krishna & Co, to jointly develop spice operations in Rwanda. In addition to chilli and ginger, they are interested in setting up an out-grower model for turmeric and pepper plantation to serve international markets, including the Japanese market. They have expressed interest in starting with a 20 hectare pilot, and will visit Rwanda in March 2018 to finalise the farming location.

‘SITA’s Rwandan spices story is only beginning to unfold,’ observed Dr. George.  ‘The coming years will definitely see more and more Indian spices companies eyeing Rwanda for expanding their operations.’

Voices of SITA
Voices of SITA
This blog provides a window into the SITA project. Through stories from India, Ethiopia, Kenya, Rwanda, Uganda and the United Republic of Tanzania, this blog showcases the project’s progress and impact.